Japan amends Export Control administration & links to AEO

Posted on: 02/04/2013

The Ministry of Economy Trade and Industry (“METI”) issued a notification on 1 April 2013 to update the application procedures for bulk export license for dual-use goods. The notification includes the following updates which are effective immediately:

Previously, it was mandatory that a full-time employee attended the METI official export control seminar, for new bulk license applications, and extension of bulk license validity. With this notification, this requirement is now removed and replaced by the following requirement: "Exporter should get latest export control regulatory update under Foreign Exchange and Foreign Trade Law and make it known to relevant employees who work in export operation". This notification by METI places the onus of responsibility on exporters to have a fully compliant Internal Control Program (“ICP”).

AEO able to apply for bulk license without METI on-site audit. Previously, in order to apply for bulk export licenses in Japan (excluding White country bulk license whereby on-site audit by METI is not required), an on-site audit by METI was a mandatory requirement for new applicants. With this notification, METI will eliminate on-site audit requirements exclusively for Approved Exporters (“AEO”). In other words, existing AEO will be able to apply for bulk license without having to go through METI on-site audit.

As of February 2013, there are only 245 AEO companies in Japan. The AEO system is governed by Customs under the Ministry of Finance, while export controls is under METI. Historically, there has been little interaction between Customs and METI regarding regulatory developments on export controls. This announcement is an effort to streamline the activities between the Ministries.